The Supreme Court held today that district courts must follow Fed.R.Civ. 23 in class actions alleging violations of state law even though the state statute prohibits prosecution of the claim as a class action.  In Shady Grove Orthopedic Assoc. v. Allstate Insurance Co., No. 08-1008, 2010 WL 1222272 (Mar. 31, 2010), the Court held that Rule 23 trumps NY CPLR 901(b), which prohibits class actions under New York statutes authorizing a claim for statutory or multiple damages.  That statute has barred claims under New York’s antitrust statute (the Donnelly Act) as well its Deceptive Trade Practices Act.  Numerous state consumer protection statutes likewise have prohibitions on class actions.  Shady Grove breathes life into class actions in federal court under those statutes.

Wild Law Group PLLC (“WLG”) has been named interim lead and liaison counsel for the indirect purchaser class in In re Packaged Ice Antitrust Litig., MDL No. 1952 and interim lead counsel for the indirect purchaser class in In re Dairy Farmers of America Antitrust Litig., MDL No. 2031.  The WLG attorneys (Matthew S. Wild, Max wild and John Perrin) will continue their roles as interim lead and liaison counsel in these cases that they had at predecessor law firms.  

WLG was formed in March 2010.  With offices in New York, Michigan and London, WLG is a litigation boutique that specializes in antitrust, class actions and commercial litigation. WLG has been named lead class counsel in multidistrict litigation. WLG attorneys have represented clients in some of the largest antitrust controversies in the United States. They have tried more than 100 cases to juries in state and federal courts.

On November 25, 2009, the court in In re Static Random Access Memory Antitrust Litig., No. C 07-01819 CW, 2009 WL 4263524 (N.D. Cal. Nov. 25, 2009), certified 28 indirect purchaser classes – one nationwide class for injunctive relief under section 16 of the Clayton Act and 27 separate indirect purchaser damages classes under the laws of Arizona, Arkansas, California, Florida, Hawaii, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Mexico, New York, North Carolina, North Dakota, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Washington, West Virginia, Wisconsin, Puerto Rico and the District of Columbia.
Injunction: the court certified the class under Rule 23(b)(2). It rejected the standing challenge holding “Plaintiffs have alleged sufficient facts to establish Article III standing for their nation-wide injunctive relief class. IP Plaintiffs allege that Defendants and their co-conspirators entered into a continuing conspiracy in restraint of trade artificially to raise prices for SRAM in the United States. They further allege that these market-wide overcharges were then passed through the chains of distribution, and that they were injured by paying supra-competitive prices when they indirectly purchased Defendants’ products.” The court also rejected defendants’ argument “because IP Plaintiffs seek to certify a nation-wide injunctive class from November 1, 1996 through December 31, 2006, they have impliedly alleged that the conspiracy ended in 2006. However, a finite proposed class period does not defeat certification of a class under Rule 23(b)(2). See, e.g., Jaffe v. Morgan Stanley & Co., 2008 WL 346417, at *3 (N.D.Cal.) (certifying injunctive-relief class for settlement affecting persons employed by the defendants “at any time between October 12, 2002 and December 3, 2007). Further, IP Plaintiffs allege that the same market conditions that facilitated the conspiracy from 1996 to 2006 continue today. They allege that Defendants’ price-fixing resulted from a systematic, repeated pattern of sharing sensitive competitive information which was greatly facilitated by the cross-competitor business relationships that still exist. Thus, there is alleged a significant risk that the conspiracy will persist or reform in the future.”
Individual state damages classes: the court certified 27 different classes based on individual state law. The court rejected “Defendants[’] … concern[] that [it] will be unable to manage state-law claims from twenty-seven state classes” holding “there is no qualitative difference between a federal district court considering class certification of state claims under that state law and a federal court serving as a multi-district litigation forum performing the same task for many federal courts. Moreover, courts frequently certify classes under the laws of multiple jurisdictions. See, e.g., Norvir Anti-Trust Litig., 2007 WL 1689899, at *8 (N.D.Cal.) (certifying class under the common law of forty-eight states); In re Pharm. Indus. Average Wholesale Price Litig., 233 F.R.D. 229, 230-31 (D.Mass.2006) (certifying multi-state defendant subclasses under the consumer protection laws of forty-one states).” In holding that the individual issues predominated over the individual issues, the court held that “there [wa]s a reasonable method for determining on a class-wide basis whether and to what extent that overcharge was passed on to each of the IP Plaintiffs at all levels of the distribution chain.”
Experts: the court rejected each parties’ challenge to the other parties’ expert holding that the appropriate standard is “whether the expert evidence is sufficiently probative to be useful in evaluating whether class certification requirements have been met.” The court made short shrift of the challenges holding “Although each side presents myriad valid challenges to the other’s expert, the Court concludes that these challenges are of the type that go to the weight of the evidence, not the admissibility. … The parties’ motions to exclude reflect disagreement with the opposing parties’ position; however, this disagreement does not warrant exclusion.”

On September 15, 2009, LEVITT & KAIZER and THE LAW OFFICES OF MAX WILD (interim lead counsel for the class) and THE PERRIN LAW FIRM (liaison counsel) filed an amended class action complaint seeking recovery on behalf of packaged ice consumers in 47 states and the District of Columbia.  The amended complaint provides further details of the conduct of defendants Reddy Ice, Arctic Glacier and Home City Ice that were not available when the original complaint was filed.  As the amended complaint explains,

“[t]his action arises from a long-standing agreement among defendants – producers of packaged ice in the United States and Canada, which have a combined market share of nearly 70 percent — not to compete with each other. In furtherance of their cartel, defendants agreed to, and did in fact, fix and inflate prices, allocate territories and customers, acquire competitors, refuse to compete and otherwise commit a variety of unlawful and anticompetitive acts. The purpose and effect of the cartel has been to fix, raise, maintain and stabilize the prices paid for ice sold in plastic bags or large blocks (“packaged ice”) throughout the United States. Evidence of the existence of the conspiracy includes but is not limited to admissions made by participants in the conspiracy, a guilty plea by one of the defendants to a violation of Section 1 of the Sherman Act, defendants’ suspension of officers who they believe may have participated in the cartel, defendants’ attempts to intimidate and bribe a whistleblower and economic behavior that would have been inconsistent with each defendant’s self-interest or implausible in the absence of the conspiracy.”

The amended complaint is available here: Ice Amended Complaint

The defendants have 60 days to respond.

Yesterday, the United States District Court for the Eastern District of Michigan appointed the LEVITT & KAIZER group interim lead counsel, in particular Matthew S. Wild, Richard Levitt, Max Wild and John M. Perrin, for the indirect purchaser class in In re Packaged Ice Antitrust Litigation, MDL 1952.  In granting their motion for appointment over another, Judge Paul D. Borman held,

“Levitt & Kaizer is comprised of an experienced group of attorneys.  Matthew Wild is an experienced anti-trust practitioner, having litigated, on the defense side, many antitrust class action cases, including indirect purchaser lawsuits. Richard Levitt is an experienced trial attorney, having tried many complex cases before federal juries.  Max Wild is a former Assistant United States Attorney and former trial attorney for the Department of Justice. As a trial attorney, Mr. Wild has tried a number of antitrust cases. This breadth of antitrust and trial experience establishes that Levitt & Kaizer has the experience necessary to litigate this complex class action on behalf of the indirect purchaser class.”

Id., Doc. 175, dated June 1, 2009 (attached below).  Max Wild is the principal of the Law Offices of Max Wild.  In addition, John M. Perrin, appointed as liaison counsel for the indirect purchaser class, is the principal of the Perrin Law Firm.

As explained in LEVITT & KAIZER’s complaint, “[t]his class action seeks to recover damages and injunctive relief arising from a long-standing cartel among defendants – producers of packaged ice in the United States and Canada.  In furtherance of their cartel, defendants agreed to, and did in fact, fix and inflate prices, allocate territories and customers, acquire competitors, refuse to compete and otherwise commit a variety of unlawful and anticompetitive acts.  The purpose and effect of the cartel has been to fix, raise, maintain and stabilize the prices paid for ice sold in plastic bags or large blocks (‘packaged ice’) throughout the United States.  Defendants have been the targets of an ongoing criminal investigation by the Antitrust Division of the United States Department of Justice.  That investigation has resulted in one guilty plea for a violation Section 1 of the Sherman Act, execution of search warrants and issuance of grand jury subpoenas.”  See copy of the complaint below.

Ice Lead Counsel Order

Ice Complaint

On May 2, 2008, the Eastern District of Pennsylvania granted class certification in In re Wellbutrin SR Direct Purchaser Antitrust Litig., No. 04-5525, 2008 WL 1946858 (E.D. Penn. May 2, 2008). Plaintiffs claim that GlaxoSmithKline unlawfully extended its monopoly over Wellbutrin SR through fraud on the patent office and sham litigation against potential generic entrants. Defendant argued that a conflict exists among class members because national wholesalers benefit from the lack of generic competition — generic manufacturers often bypass wholesalers. The court rejected this argument because as generic Wellbutrin SR has been available since 2004, no theoretical conflict could still exist. Plaintiffs met the other requirements for class certification. Notably, plaintiffs offered a “colorable method” to prove common impact. Plaintiffs’ expert plans to examine the impact of generic entry on brand name pharmaceuticals through an analysis of public data collected on the dispensation and purchases of prescription drugs. In this case, class certification was straightforward. It can become more difficult when, for example, prices are negotiated on an individual basis. See, e.g., Blades v. Monsanto Co., 400 F.3d 562, 569 (8th Cir. 2005) (denying class certification because, inter alia, “the market for seeds is highly individualized, requiring particularized evidence to determine the competitive price that would have prevailed”).

In In re Scrap Metal Antitrust Litig., No. 06-4511, 2008 WL 2050820 (6th Cir. May 15, 2008), the Sixth Circuit affirmed the $20 million jury verdict.  The Sixth Circuit rejected defendants’ Daubert challenge premised on the claim that plaintiffs’ expert relied on unreliable data.  The court characterized this type of attack as one directed to the results and not the methodology and therefore should not be excluded under Daubert.  Rather, “vigorous” cross-examination should be sufficient to reveal to the jury these flaws.  Notably, the defendants’ expert conceded that even use of the flawed data should not affect the results because those data moved in parallel to the defense expert’s data.  This decision illustrates the importance of showing in a  Daubert challenge that any flaws were actually material to the result.  ”Pitfalls to Avoid in Proving Price-Fixing Damages,” Antitrust Litigator (Spring 2006) — linked in the Articles page above — examines strategies to pursue in Daubert challenges.  The Sixth Circuit also affirmed class certification holding that the predominance requirement was satisfied because there was a class-wide method to prove damages

On March 28, 2008, the United States Court of Appeals for the First Circuit reversed the grant of class certification in In re New Motor Vehicles Canadian Export Antitrust Litigation, Nos. 07-2257, 07-2258, 07-2259, 2008 WL (1st Cir. Mar. 28, 2008). In that case, plaintiffs alleged a conspiracy among car manufacturers — a violation of Section 1 of the Sherman Act — to discourage U.S. customers from purchasing cars in Canada — which were cheaper at the time due to favorable exchange rates — for their use in the U.S. The manufacturers allegedly used a variety of mechanisms to discourage this customer practice such as refusing to honor warranties on Canadian cars. The United States District Court for the District of Maine certified two classes — (1) injunctive relief class under Section 16 of the Clayton Act and (2) damages class under various state antitrust and consumer protection laws. Defendants argued that plaintiffs’ claim for injunctive relief was moot because there is no longer a “realistic threat” of future harm. As a result of the weak dollar, there is no longer a realistic threat that manufacturers will conspire to keep consumers from importing cars from Canada. The Third Circuit agreed and reversed class certification on the injunctive relief claim with instructions to dismiss that claim. The Third Circuit also agreed with the District Court’s treatment of the damages class — that plaintiffs should have more time to develop their theories to support class certification. The Third Circuit, nevertheless, vacated the preliminary grant of class certification because it was concerned that subject matter jurisdiction no longer existed. With the federal claim now dismissed, there would have to be an independent basis for federal subject matter jurisdiction over the damages claims under state law. The District Court was instructed to determine if jurisdiction existed.